Overview of Employee Benefits in Vietnam
Are you an HR manager or foreign SME navigating employee benefits in Vietnam? This guide clarifies mandatory benefits under Vietnam labor law—such as social insurance, health and unemployment insurance, annual leave, maternity/paternity leave, and paid time-off—and contrasts them with competitive employee benefits like 13th-month salary, private insurance, wellness stipends, flexible work options, and extra leave days. With major Social Insurance Law reforms effective July 1, 2025—including expanded coverage for part-time and probationary workers—understanding employee benefits law Vietnam compliance while offering attractive packages is critical to hiring, retaining, and engaging talent efficiently.
Employee Benefits Law and Updates (2025 Onwards)
Vietnam’s 2025 reforms are reshaping the hiring and retention landscape:
- Expanded Social Insurance: Part-time, probation, managers, gig workers included—opening access to a wider, compliant talent pool.
- Reference Salary System: Replaces basic salary for more predictable benefit contributions.
- Pension Eligibility at 15 Years: Supports mid-career retention.
- Voluntary Insurance for Non-Full-Time Staff: Now includes maternity, pension, and accident cover.
- Lump-Sum Withdrawal Restrictions: Encourages long-term retention.
- Digital Onboarding (VNeID): Foreign nationals now need digital ID for employment and insurance processes.
- Stricter Penalties: 0.03% daily fines highlight the need for automated compliance tracking.
- Labor Law Improvements: New clarity on written contracts, probation, overtime, and retirement age reduces legal risks.
Hiring Benefits:
- Access to legally compliant talent (probationary, part-time, contract workers)
- Predictable labor costs thanks to reference salary and pension reforms
- Increased retention via pension benefits and restricted withdrawals
- Faster onboarding for expats via digital IDs (will need a TRC)
- Stronger employer brand through compliance and benefits transparency
Mandatory Employee Benefits in Vietnam (Vietnam Labor Law)
Social Insurance Law and Compliance Requirements
Effective July 1, 2025, the new Social Insurance Law (No. 41/2024/QH15) extends mandatory coverage to probationary, part-time, non-salaried managers, and household business operators.
- Employers contribute 17.5% and,
- Employees 8% toward social security
- Late contributions incur a 0.03% daily penalty.
Health Insurance and Unemployment Insurance
Contributions cover medical care, maternity, unemployment support, workplace accidents, and occupational hazards.
- Employers must pay approximately 3% for health insurance, and
- Employers must also cover 1% for unemployment insurance.
Annual Leave and Paid Time Off
Under Vietnam labor law, full-time employees with at least 12 months’ service receive:
- A minimum of 12 days of paid annual leave (14–16 days for hazardous roles)
- One extra day every five years of service.
Unused leave must be compensated at exit; carry-over rules are employer-defined.
Maternity, Paternity, Sick Leave & Other Statutory Allowances
- Maternity leave: 6 months paid, with an additional 30 days for subsequent children.
- Paternity leave: 5 days for natural birth, 7 for C-section.
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Sick leave: 30–60 days/year based on contributions, up to 180 days for severe illness.
Employers must uphold documentation, anti-discrimination practices, and severance protections.
Market Competitive Employee Benefits Packages for Vietnam SMEs
To thrive in Vietnam’s competitive talent landscape, many employers are enhancing their employee benefits in Vietnam packages with perks that distinctly align with employee priorities:
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13th-Month Salary (Tet Bonus)
Over 85% of employees expect this bonus before Lunar New Year. It’s a powerful retention tool in the absence of legal requirement. -
Private Health, Life & Supplementary Insurance
More than 90% of companies now provide private plans covering dental, vision, critical illness, and family members to support overall employee health. -
Housing & Transport Allowances
These stipends and commuter benefits address the rising cost of living in urban centers, making roles in those areas more attractive to top talent. -
Flexible / Hybrid Work & Extra Annual Leave
About 35% of firms offer flexible work, and many also grant 2–5 extra leave days (for birthdays, wellness, mental health), promoting strong work-life integration. -
Wellness Perks & Team-Building Activities
With 71% of employers prioritizing health benefits, packages now typically include gym, mental health support, meal vouchers, and team retreats. -
Professional Development & Career Pathing
Nearly half of companies invest in mentorship, certification, and training as core retention strategies.
Why These Perks Matter: WTW 2023 Vietnam Surveys show 60–80% of employers are boosting benefits spend—focusing on health, flexibility, and development.
Blending these with statutory elements under Vietnam labor law helps SMEs attract and retain talent, competing with larger firms.
Employee Benefits Compliance for HR in Vietnam
Payroll Audits and Digital Record-Keeping
Vietnam's push toward digital governance—through systems like VNeID and the national e-social platform—requires that companies shift fully to electronic labor records.
All payroll and benefits documentation (e.g., social insurance contributions, leave accruals, employment status) must be digitized and stored in compliance with the Ministry of Labor, Invalids and Social Affairs (MOLISA) and Vietnam Social Security (VSS) standards.
Quarterly and annual internal audits should verify contributions, proper contract classifications, and accuracy of payroll data. Employers are advised to integrate their Human Resource Information System (HRIS) and payroll software with Vietnam Social Security (VSS) application programming interfaces (APIs) to ensure seamless reporting and real-time compliance tracking.
Compliance Pitfalls & Solutions
Common errors include:
- Misclassification of contracts: Failure to classify part-time or probationary workers accurately can trigger audits or backpay demands.
- Late or missed contributions: These incur a statutory penalty of 0.03% per delayed day.
- Non-VND payments: Payroll must be processed in Vietnamese dong (VND); paying in foreign currency breaches labor regulations.
Solutions:
- Conduct monthly internal compliance checks
- Establish robust audit trails with timestamps and supporting documents
- Outsource complex payroll functions to local experts to mitigate risk
Adapting to 2025 Reforms
Update all employment policies, contracts, and HRIS systems by July 1, 2025, to meet the requirements of the updated Social Insurance Law. Provide targeted training for HR and finance staff on expanded employee coverage, updated contribution rules, and the digital submission of records via e-social platforms.
Building a Competitive Employee Benefits Package in Vietnam: Practical Steps
Designing for Vietnamese Talent
To design a compelling package, HR leaders should begin with direct employee engagement—gathering feedback via surveys, focus groups, or suggestion boxes to understand what benefits matter most.
In Vietnam, health-related perks, flexible leave, and financial incentives (like Tet bonuses and transport support) rank highly. Partnering with local vendors (e.g., Bao Viet, Liberty Insurance) helps build customized group packages for health, wellness, and supplemental insurance.
Additionally, integrating mental health support, upskilling opportunities, and childcare subsidies can make a substantial difference for working parents.
2025–2026 HR Checklist
- Update labor contracts: Ensure contracts reflect the latest Social Insurance eligibility rules for probation, part-time, and freelance staff, and revise job descriptions in line with new statutory role classifications.
- Digitize payroll systems: Align payroll software with VNeID and Vietnam’s e-social security platform, integrating automated contribution tracking, electronic signatures, and leave management workflows.
- Train internal teams: Host cross-functional workshops, simulate digital onboarding scenarios, and engage certified compliance professionals to train HR, finance, and payroll departments ahead of July 1, 2025.
- Review vendor and insurer agreements: Reassess group benefit providers and payroll vendors to ensure they comply with upcoming legislation and integrate with national systems.
- Conduct trial audits: Perform mock compliance audits quarterly to identify issues with classification, enrollment, or documentation early—before official inspections.
Managing Enrollment & Claims
Establish standardized enrollment procedures for Social Insurance (SI), Health Insurance (HI), and Unemployment Insurance (UI), ensuring new hires are registered within 30 days of employment.
Designate HR leads to track eligibility and coverage timelines. Provide onboarding materials in Vietnamese and English to explain benefit portability—especially for contract staff, returning nationals, or expats.
Use visual SOPs and checklists to demystify the SI claim process. Equip HR with tools to help employees complete paperwork, submit claims digitally, and track status. Implementing service-level targets (e.g., claim response in 3 days) and maintaining a single HR contact point improves employee experience and reduces administrative delays.
Set clear timelines and SOPs for social insurance (SI), health insurance (HI), and unemployment insurance (UI) enrollment. Employees must be enrolled within 30 days of hire.
Educate staff on benefit portability—especially for job transitions or those returning from overseas—and provide multilingual guides to help navigate SI claim procedures. Simplified claim processes, a designated HR contact, and timely communication enhance employee satisfaction and reduce admin burden.
Vietnam Employee Benefits: FAQ & Best Practices
- Do foreign workers get the same benefits? Yes—on contracts ≥12 months, foreign staff receive full Social Insurance and Health Insurance coverage.
- Is the 13th-month salary mandatory? No—it’s a cultural norm and market expectation, not a legal requirement.
- Are part-time/probation staff insured? Yes—even part-time and probationary staff are now compulsory under Social Insurance laws.
- Can benefits substitute salary? No—legal benefits must be provided separately under Vietnam labor law.
- How quickly must new employees be enrolled in insurance? Within 30 days of their start date—delays may result in penalties or denied claims.
Advanced HR Tips: On-the-Ground Guidance
- Prepare for Digital Inspections - Vietnam’s labor inspections now include digital audits. Partnering with provider experts ensures you're audit-ready and compliant without extra internal resources.
- Communicate Benefits Visibly - Town halls, e-ID guides, transparent pay-slips, and a benefits FAQ will build trust, clarity, and employee engagement.
- Culture + Compliance = Loyalty - Top recruiters emphasize combining legal benefits with cultural perks like team meals, Tet bonuses, and career progression to foster greater belonging and retention.
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Disclaimer:
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or investment advice. While every effort has been made to ensure accuracy at the time of publication, laws and regulations may change. Readers are encouraged to consult with qualified legal or financial advisors before making decisions related to foreign investment or share transfers in Vietnam. United Consulting is not liable for any actions taken based on this content.
Employee Benefits in Vietnam: What’s Legally Required vs. Market Competitive